[orlp]

Yes, that goes into the '50% cash' part of the offer. With a 20B credit line and 7.5B cash from their own coffers (which they claim to have, so let's believe them on their word there), you cover the cash portion.

The issue is the non-cash portion of the offer. They claim that the remaining 27.5B is covered by GameStop stock. But that's more than double the market cap of GameStop.

[vessenes]

With the approval of the board of directors (in most cases), a company can simply create new shares and give them to whomever they like.

I would guess that this information will bother you.

If it helps, because many public company executives are compensated on earnings per share, most C level teams are incentivized to buy back shares, thus decreasing the denominator for the EPS calculation without changing fundamental economics of the company.

If this also bothers you, you should guess what Buffet says and thinks about those two dynamics, and then read up on it, and you will learn something interesting about public markets!

[gizajob]

I’m sure if eBay wanted to build 1800 brick and mortar stores they could do so for less than twenty seven billion dollars.

[ball_of_lint]

> which they claim to have, so let's believe them on their word there

So you're just outright accusing GameStop of fraud?

https://www.sec.gov/ix?doc=/Archives/edgar/data/1326380/0001... page 36 of their filing with the SEC lists the cash and marketable equities.

The non-cash (stock) portion of the offer needs to be valued against the resulting entity, which will own eBay. This will likely result in current eBay shareholders owning half or more of the resulting entity. (Though we don't know specific numbers yet). That's normal for a M&A where the smaller company is doing the buying.

[orlp]

> So you're just outright accusing GameStop of fraud?

I have no idea why you interpret my words that way. I just meant that I didn't want to analyze the cash portion of their offer any further and just wanted to take it at face value.

[ball_of_lint]

They don't claim to have it; they have it.

It's like saying 'tobacco allegedly causes cancer' - the proof is very public and available. The typical reason for saying it like that is to indicate you don't believe it.

[Lionga]

You understand that the gamestop stock would then be owning ebay, thus be worth Ebay + Gamestops Valuation?

[orlp]

Alright, my company MEME offers to buy Apple then for $1 plus 100% of MEME's stock, which is worth more than Apple then since it will own Apple.

If you word it like this it's just a hostile proposed change of leadership. Weird way to apply to become CEO of eBay, but sure.

[ceejayoz]

You can do that.

The shareholders have to vote for it, though.

[surgical_fire]

They would also be owning a company that now would have +20B in debt.

They now own ebay. They would include in that math 20B in debt plus Gamestop.

This sounds like a pretty bad deal for ebay investors.

[Vespasian]

Are they under any obligation to ground the value of their own stock or can a salesman simply claim that the "true" value of that stock is much much more than it currently seems to be?

[Anonbrit]

Stock is worth exactly what people will pay for it. Ebay share holders get to vote to accept or reject this deal

[croemer]

Presumably stock market valuation is grounding?

Also, eBay shareholders can vote down the acquisition if they don't think the deal is good for them.